Beyond Apple Pay and Google Pay: The Power of Issuer Wallets

At Verestro, we have implemented more than 50 contactless and tokenization projects for banks, fintechs and other payment institutions. Let me give you a quick overview of the key differences between the main types of contactless payment technologies.

Table of Contents:

1. What Are X-Pays?

2. What Is An Issuer Wallet?

3. X-Pays & Issuer Wallet - A Hybrid Approach

What Are X-Pays?

X-Pay is a generic term used to describe mobile payment platforms like Apple Pay and Google Pay. These platforms allow users to make contactless payments using their smartphones. To enable X-Pay, issuers must partner with these platforms and adhere to their specific requirements.

If you are a card issuer in today's world, you usually need to implement Apple Pay and Google Pay to enable your users to benefit from various payment activities on mobile phones. We think it is mandatory in today's world for standard card use cases. The power of Apple and Google is so strong that avoiding these platforms really impacts your customers.

In general, these technologies are not difficult to implement. If you use our Token Management Platform, the implementation time can be reduced to weeks. You will also need to sign contracts with Apple and Google. In the case of Apple, they charge additional fees for registering a card with Apple Pay. In the case of Google, they collect all of your users' transactions to make money from advertising and data management.

These are the main drawbacks. In both cases, you have to keep up with their requirements and changes, but if you work with certified providers, you do not have to worry about this because a processor can solve these problems for you. 

Both Google and Apple's solutions enable contactless, in-app and e-commerce payments in their browsers. Non-contact payments are an important part of these projects. You should not just focus on contactless payments. 

It is worth mentioning that implementing tokenization usually gives you access to other X-Pays such as Fitbit Pay, Garmin Pay or others. These are much smaller companies and we are treating them as a nice-to-have in card issuance projects today. 

What Is An Issuer Wallet?

An Issuer Wallet is a digital wallet solution. It enables users to store and manage their payment cards digitally, allowing for contactless payments and other digital transactions. Issuer Wallets offer greater flexibility and control compared to X-Pay platforms, as they are not tied to specific mobile operating systems or device manufacturers. In such cases you do not sign contracts with Apple or Google, but you implement the technology (both mobile SDKs and backend) that allows you to go live with mobile contactless payments without signing contracts with Apple or Google. This was previously only possible for Android, but recently (2023/2024) Apple has allowed non-Apple Pay contactless payments on iPhones in the European Union.

In such cases, you will need to obtain and certify SDKs and backend components to go live with contactless payments. Such developments typically take 12-24 months and the software needs to be constantly updated, so it is actually better to try and use a certified partner for this activity to avoid ongoing development costs just for your project.

From a contactless use case perspective, transactions work in a very similar way to X-Pays, but you have more flexibility. On Android, for example, you can implement a contactless payment as soon as the phone screen is unlocked. You can - but do not have to - ask for additional authentication. You can also be sure that your users' data and transactions are not shared with third parties (Apple and Google) for their benefit. 

A big advantage of the Issuer Wallet SDK is that it can work on more than just Android phones - we have live implementations on Huawei devices, for example. This detail has important business implications for your users. 

X-Pays & Issuer Wallet - A Hybrid Approach

In today's world, working with Apple or Google is a must, but we strongly recommend implementing Issuer Wallets at the same time, as it will give you more flexibility and business security in the long run. The costs and processes are not very different, but the additional benefits of an issuer wallet such as flexibility, more devices, lower transaction costs make it worthwhile to implement. 

Consider a hybrid strategy that combines the strengths of Issuer Wallets and mobile payment platforms:

1. Prioritize Apple Pay and Google Pay: Implement these platforms to tap into their large user bases and streamlined user experience.

2. Invest in Issuer Wallet Technology: Leverage a robust Issuer Wallet solution to offer a more flexible and secure payment experience.

3. Leverage Partnerships: Collaborate with technology providers to reduce development time and costs.

4. Stay Updated with Industry Trends: Continuously monitor the evolving digital payment landscape and adapt your strategy accordingly.

By carefully considering the advantages and disadvantages of each approach, you can make informed decisions to optimize your digital payment strategies. A well-executed hybrid strategy can provide a competitive edge and deliver exceptional value to customers. Check out Verestro’s tokenization solutions and contact us to implement contactless payments in your app!